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Implementation Completion Report (ICR) Review - Agrarian Reform Communities Development Project

1. Project Data:   
ES Date Posted:
Project Name:
Agrarian Reform Communities Development Project
Project Costs(US $M)
 105.7  105.4
Loan/Credit (US $M)
 50.0  49.7
Sector, Major Sect.:
Irrigation & drainage, Central government administration, Other social services, Roads & highways, Water supply,
Agriculture fishing and forestry; Law and justice and public administration; Health and other social services; Transportation; Water sanitation and flood protection
Cofinancing (US $M)
L/C Number:
Board Approval (FY)
Partners involved
Closing Date
12/31/2003 12/31/2003
Prepared by: Reviewed by: Group Manager: Group:  
John R. Heath
Christopher D. Gerrard Alain A. Barbu OEDST

2. Project Objectives and Components:

a. Objectives

"The project would assist the Government in strengthening farmer organizations in the Agrarian Reform Communities to plan and undertake development activities which would raise farmers' incomes and provide further opportunities for sustainable growth. In particular, the project would (i) assist agrarian reform beneficiaries and other farm families in the selected Communities to gain access to productive resources, social and physical infrastructure; and (ii) support Agrarian Reform line agencies, Local Government Units, NGOs, People Organizations and coordinate their activities" (Staff Appraisal Report).

Note. The selection of the Agrarian Reform Communities that would participate in the project depended on an expression of willingness by the Local Government Units to assume responsibility for counterpart funding, a judgment by the Department of Agrarian Reform about the "organizational maturity" of the Agrarian Reform Community (using a standardized rating scale), an assessment of the potential for project impact (tending to favor Communities with the largest number of land reform beneficiaries), and the local availability of suitably-qualified technical assistance providers. Thus, while the project is described as "demand-driven" these stringent eligibility criteria circumscribed the pool of potential beneficiaries who might compete for project funding.

b. Components

(i) Rural Infrastructure (Estimated cost, US$58.8 million; Actual cost, US$56.7 million). Included farm-to-market roads, bridges, communal irrigation systems, potable water supply systems and post-harvest facilities.
(ii) Community Development and Technical Assistance (Estimated, US$7.5 million; Actual, US$6.1 million). Measures to strengthen the capacity of community groups, the Department of Agrarian Reform and local government to help plan and implement community-driven development activities.
(iii) Agriculture and Enterprise Development (Estimated, US$33.6 million; Actual, US$37.0 million). Provision of technical and small business advisory assistance, dissemination of improved farm and non-farm technology, and measures to strengthen market linkage.
(iv) Project Management (Estimated, US$5.8 million; Actual, US$5.6 million). Involved coordination of activities by the Central Project Office, assisted by the Department of Agrarian Reform's regular administrative and financial management units.

c. Comments on Project Cost, Financing and Dates

Costs, financing and scheduling did not deviate significantly from appraisal forecasts.

3. Achievement of Relevant Objectives:

The development objective may be broken down into two elements both of which were highly relevant:
(i) Increase farmers' incomes (Achieved). The project was well targeted, the average baseline (1997) family income of 37,800 pesos falling below the national poverty threshold (48,200 pesos). The real values of net household incomes in 98 of the 102 target Agrarian Reform Communities increased on average by 63 percent, compared with the project's target of 40 percent. (Data for the other four Communities were not included because of the high rate of increase not attributable to the project). The observed increases in household incomes is attributed mainly to improvements in farm productivity, farm income increasing in all but nine Communities. (Off-farm activities were a less significant source of income growth). The increase in household incomes is expected to be sustained in view of the crop diversification and intensification that took place, the decrease in transportation and handling costs, and the social capital and assets built through the project.
(ii) Build capacity for developing Agrarian Reform Communities (Achieved). The investment plans of 232 districts (barangays) were incorporated in the respective municipal development plans. People Organizations were strengthened (the Department of Agrarian Reform applied each year a checklist of questions bearing on organizational maturity: 178 out of 233 Organizations achieved the highest rating on the scale). Funds and in-kind contributions have been mobilized at the community level to ensure that infrastructure is properly maintained. Savings have been built up with the expansion of farm and non-farm business. Local Government Units were strengthened, entailing improved participatory planning, design standards and supervision and increased transparency in procurement contracts and institutionalization of infrastructure maintenance.

4. Significant Outcomes/Impacts:

  • 827 km of farm-to-market road were built (target 800 km);
  • 10,028 ha were irrigated (target 10,019 ha);
  • Average costs of irrigation per hectare were US$2,232 (new schemes) and US$1,078 (rehabilitated schemes), respectively 11 percent and 20 percent lower than the appraisal estimates;
  • Cropping intensity increased by an average of 43 percent (target 50 percent);
  • Crop yields increased significantly (e.g. irrigated lowland rice up by 34 percent, compared to the appraisal target of 10 percent);
  • Business assets in Agrarian Reform Communities increased by US$239,774 (target US$200,000);
  • The economic rate of return was re-estimated at 26 percent (target 20-25 percent).

5. Significant Shortcomings (include non-compliance with safeguard features):

Only limited access to formal credit was achieved because most beneficiaries could not meet the Land Bank of the Philippines eligibility requirements. (The project design was sufficiently flexible for alternatives to be found, e.g. NGO credit programs).

6. Ratings:ICROED ReviewReason for Disagreement/Comments
Institutional Dev.:
Bank Performance:
Borrower Perf.:
Quality of ICR:

7. Lessons of Broad Applicablity:

  • The eligibility criteria for communities to participate in a project of this nature can be designed to maximize the likelihood of long-term development impact, particularly by favoring local governments willing to assume responsibility for counterpart funding--although this circumscribes the pool of potential beneficiaries (the poorest may be left out) it helps to ensure sustainability;
  • It is possible to simultaneously build up, in a complementary fashion, the capacity of community groups on the one hand, and local government on the other, thus avoiding the tendency of many community-driven development projects to sideline existing political institutions;
  • Sustainability can be enhanced by using local inspectors to monitor subproject performance and by providing conditional local government grants that are converted into loans if the operation and maintenance of completed subprojects is not satisfactory;
  • The transition to regular operations will be facilitated when, as in this case, project activities are coordinated by line agency staff in line with the government's regular program.

8. Audit Recommended?  Yes

          Why?  In order to learn more from what appears to be a case of good practice community-driven development.

9. Comments on Quality of ICR:

The ICR is concisely and clearly written. The data is rich and persuasively backs up the ratings. The ICR could have provided more information on the development of the capacity of community groups to plan and implement community-driven development activities, and Annex 1 could have provided qualitative as well as quantitative indicators.

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